Legislature(2001 - 2002)

03/30/2001 01:16 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 177 - CAMPAIGN FINANCE: CONTRIB/DISCLOS/GROUPS                                                                             
                                                                                                                                
Number 0078                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG announced  that the first order  of business would                                                               
be HOUSE BILL  NO. 177, "An Act placing  certain special interest                                                               
organizations within  the definition  of 'group' for  purposes of                                                               
Alaska's  campaign  finance   statutes;  providing  a  contingent                                                               
amendment to  take effect in case  subjecting these organizations                                                               
to  all of  the statutory  requirements pertaining  to groups  is                                                               
held  by  a  court  to  be  unconstitutional;  requiring  certain                                                               
organizations  to   disclose  contributions  made  to   them  and                                                               
expenditures  made  by them;  requiring  disclosure  of the  true                                                               
source of campaign contributions;  and providing for an effective                                                               
date."  [Before the committee was CSHB 177(STA).]                                                                               
                                                                                                                                
Number 0205                                                                                                                     
                                                                                                                                
BROOKE   MILES,  Executive   Director,   Alaska  Public   Offices                                                               
Commission  (APOC),  testified  via teleconference.    Ms.  Miles                                                               
informed  the  committee  that   this  afternoon  APOC  would  be                                                               
reviewing  HB 177,  and therefore  at  this point  she noted  her                                                               
testimony  would  be based  on  the  staff's  review only.    She                                                               
related   her  understanding   that   HB  177   would  permit   a                                                               
proliferation of  the non-group entities described  by the Alaska                                                               
Supreme  Court in  its decision  on the  campaign finance  reform                                                               
law.  Current APOC regulations  narrowly interpreted that area of                                                               
law   and  established   a   process   through  which   nonprofit                                                               
corporations could  qualify to participate in  candidate election                                                               
activities.    However,  HB  177 would  change  that  and  permit                                                               
entities that may  not be nonprofit corporations,  but still meet                                                               
the three-point test  identified by the Alaska  Supreme Court, to                                                               
qualify.                                                                                                                        
                                                                                                                                
MS. MILES  explained that  the three-point  test says  that these                                                               
entities do not  participate in business activities,  do not have                                                               
shareholders  who would  have  a  claim on  the  earnings of  the                                                               
association, and  are independent from the  influence of business                                                               
corporations.    [The  three-point test]  makes  these  non-group                                                               
entities  subject to  the same  disclosure and  filters as  other                                                               
groups in Alaska, including political  parties.  Therefore, their                                                               
contributions can only be from  individuals in the amount of $500                                                               
or  less  or  in  the  amount of  $1,000  or  less  from  another                                                               
political group.   The disclosures  would be identified  per "the                                                           
true source of  the funds" [page 2, lines 2-3],  which means that                                                           
if  one of  these entities  used  a transfer  of general  account                                                               
money, that transfer  of money would need to be  delineated as to                                                               
what  individual or  permitted  political groups  the money  came                                                               
from.                                                                                                                           
                                                                                                                                
MS.  MILES remarked  that  at  this point,  APOC  has attached  a                                                               
fiscal note  to HB 177.   That fiscal note would  address writing                                                               
regulations to establish  a process for these  groups to register                                                               
and  ensure that  these groups  meet the  test prescribed  by the                                                               
courts and  codified by  law.  Furthermore,  there would  be some                                                               
travel  costs  related to  educating  the  group with  regard  to                                                               
complying with the campaign disclosure law.                                                                                     
                                                                                                                                
Number 0446                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG  asked  if  Ms. Miles  would  interpret  this  as                                                               
leveling the  playing field  in the  sense that  special interest                                                               
groups already have the same  standards as labor unions, business                                                               
entities, and corporations.                                                                                                     
                                                                                                                                
MS.  MILES answered,  "This  would permit  the  groups that  were                                                               
identified by  the supreme  court to  continue to  participate in                                                               
activities, but  would apply  the same filters  ... and  the same                                                               
disclosure as are on all other political groups in Alaska."                                                                     
                                                                                                                                
CHAIR ROKEBERG  referred to  Section 2 of  the CS,  which defines                                                               
"contributor", in part, as "the true source of the funds".                                                                  
                                                                                                                                
MS.  MILES interjected  that candidates  cannot accept  anonymous                                                               
contributions.   Furthermore,  all  contributions  over $100  are                                                               
identified  on  the  campaign  disclosure  report  by  the  name,                                                               
address,   occupation,   and   employer   of   the   contributor.                                                               
Therefore, those  rules would also  apply to these  groups, which                                                               
is not the case under APOC's current regulations.                                                                               
                                                                                                                                
Number 0570                                                                                                                     
                                                                                                                                
MS.  MILES,  in response  to  Chair  Rokeberg, explained  that  a                                                               
political  action   committee  (PAC)   does  the   same  campaign                                                               
disclosure report that a candidate would under the current law.                                                                 
                                                                                                                                
CHAIR ROKEBERG  announced that the  committee would return  to HB
177 at about 2:15 p.m. today.                                                                                                   
HB 177 - CAMPAIGN FINANCE: CONTRIB/DISCLOS/GROUPS                                                                             
                                                                                                                                
[Contains some discussion of SB 136.]                                                                                           
                                                                                                                                
Number 1700                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG announced  that the committee would  return to the                                                               
discussion  on  HOUSE  BILL  NO. 177,  "An  Act  placing  certain                                                               
special interest  organizations within the definition  of 'group'                                                               
for purposes  of Alaska's campaign finance  statutes; providing a                                                               
contingent  amendment to  take effect  in  case subjecting  these                                                               
organizations to all of the  statutory requirements pertaining to                                                               
groups  is held  by  a court  to  be unconstitutional;  requiring                                                               
certain organizations to disclose  contributions made to them and                                                               
expenditures  made  by them;  requiring  disclosure  of the  true                                                               
source of campaign contributions;  and providing for an effective                                                               
date."  [Before the committee was CSHB 177(STA).]                                                                               
                                                                                                                                
CHAIR ROKEBERG announced an at-ease from 2:23 p.m. to 2:24 p.m.                                                                 
                                                                                                                                
Number 1688                                                                                                                     
                                                                                                                                
REPRESENTATIVE PETE KOTT, Alaska  State Legislature, testified as                                                               
chair  of  the  House  Rules Standing  Committee,  which  is  the                                                               
sponsor of HB  177.  Representative Kott remarked that  HB 177 is                                                               
a  fairly  simple piece  of  legislation  that does  two  things.                                                               
First, on page  2, lines 7-8, the definition  of "contributor" is                                                               
found.   This definition was  taken from  the U.S. v.  Hsia case.                                                             
Second,   certain   non-group   entities  or   special   interest                                                               
organizations are  being included in the  group definition, which                                                               
is  found  on page  2,  lines  11-15.    This language  was  also                                                               
extracted from federal case law.   Therefore, Representative Kott                                                               
said  he believes  that [the  state]  is conforming  to what  has                                                               
already been established.                                                                                                       
                                                                                                                                
REPRESENTATIVE  KOTT   said  he  would  illustrate   the  current                                                               
situation.    He  clarified that  [this  legislation]  refers  to                                                               
individuals  and  not  the  initiative   process.    He  posed  a                                                               
situation in  which a large  corporation had an agenda  such that                                                               
it  would  "go after"  people  who  didn't support  drilling  and                                                               
exploration  of  the  Arctic  National  Wildlife  Refuge  (ANWR).                                                               
Currently, that corporation could  contribute an unlimited amount                                                               
of  money, which  would remain  the case  under this  bill.   For                                                               
example, that  corporation could  contribute money to  the Alaska                                                               
Oil &  Gas Association  (AOGA), which could  in turn  establish a                                                               
political  action  committee  (PAC),  which  would  disburse  the                                                               
money.   Under this bill,  AOGA can still receive  [an unlimited]                                                               
amount of  money, but it would  be treated as a  special interest                                                               
group or  non-group entity  and thus [AOGA]  would be  limited in                                                               
regard to what  could be contributed to that PAC,  as is the case                                                               
with any other  group that is currently limited.   Therefore, the                                                               
limitation would  be $1,000 to the  PAC.  Currently, there  is no                                                               
limitation and there is no reporting requirement.                                                                               
                                                                                                                                
REPRESENTATIVE  KOTT related  his  belief  that this  legislation                                                               
closes what  he saw  as a loophole  in Alaska's  campaign finance                                                               
law.    Furthermore,  this  legislation   seems  to  address  the                                                               
discussion  relating to  "soft money"  that is  occurring at  the                                                               
federal level.                                                                                                                  
                                                                                                                                
Number 1437                                                                                                                     
                                                                                                                                
CHAIR ROKEBERG asked if this  legislation could be referred to as                                                               
the "Feingold-McCain Bill of the Alaska Legislature."                                                                           
                                                                                                                                
REPRESENTATIVE KOTT indicated agreement.                                                                                        
                                                                                                                                
CHAIR ROKEBERG related his understanding  that HB 177 attempts to                                                               
"bring the  light of  day" on soft  money contributions  that are                                                               
not currently reported to the public.                                                                                           
                                                                                                                                
REPRESENTATIVE KOTT  agreed with Chair  Rokeberg's understanding.                                                               
He  added  that  HB  177  levels  the  playing  field  among  all                                                               
participants.   He reiterated that this  legislation doesn't deal                                                               
with the initiative process.                                                                                                    
                                                                                                                                
REPRESENTATIVE COGHILL  asked if  the PAC  would report  the true                                                               
source of the money to APOC.                                                                                                    
                                                                                                                                
REPRESENTATIVE  KOTT answered  yes.   He  returned  to his  prior                                                               
example  and posed  a situation  in which  the large  corporation                                                               
requests  that its  employees  contribute $500  to  AOGA and  the                                                               
corporation will reimburse its employees.                                                                                       
                                                                                                                                
CHAIR  ROKEBERG interjected  that such  a scenario  is prohibited                                                               
currently.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  KOTT clarified  that [this  legislation] attempts                                                               
to   identify  the   true  source   of  the   contributions  [the                                                               
individual, and would be a matter of the public record].                                                                        
                                                                                                                                
REPRESENTATIVE  COGHILL  related  his understanding,  then,  that                                                               
this legislation would  not hinder the input  into campaigns, but                                                               
would merely  be a matter of  reporting at the same  level as for                                                               
everyone else.                                                                                                                  
                                                                                                                                
REPRESENTATIVE KOTT agreed.                                                                                                     
                                                                                                                                
Number 1283                                                                                                                     
                                                                                                                                
NOEL  WOODS  testified  via  teleconference.    He  informed  the                                                               
committee that  he is  in support  of HB  177, and  that he  is a                                                               
member  of the  [Mat-Su  Valley] Sportsman  group  that has  been                                                               
under attack  from people who  have used  this as a  cover-up for                                                               
some of their expenditures.                                                                                                     
                                                                                                                                
JEAN WOODS testified  via teleconference.  She  noted her support                                                               
of HB 177 because she  believes that nonprofits should follow the                                                               
same rules  as everyone  else if they  intend to  become involved                                                               
with political campaigns.  The public  has a right to know who is                                                               
funding a campaign.                                                                                                             
                                                                                                                                
Number 1221                                                                                                                     
                                                                                                                                
STEVE CONN,  Executive Director, Alaska Public  Interest Research                                                               
Group (AkPIRG)  testified via teleconference.   He noted  that he                                                               
had  reviewed the  1990  State v.  Alaska  Civil Liberties  Union                                                             
case, which  dealt with  politically protected  free speech.   He                                                               
said, "This  bill is quite  obviously an attempt to  rewrite that                                                               
decision."  Mr. Conn pointed out  that there is a good reason why                                                               
the Alaska  Supreme Court drew  a distinction between  the groups                                                               
that are independent from the  influence of business and everyone                                                               
else.   Furthermore, the  case is backed  by sound  evidence that                                                               
will  not disappear  no matter  how hard  one tries.   The  court                                                               
found  a large  [portion] of  business  in the  community [to  be                                                               
influencing] the political  process.  The court  cited studies by                                                               
Larry  Makinson   of  The  Center  for   Responsive  Politics  in                                                               
Washington,  D.C.,  which   pointed  out  that  of   the  top  50                                                               
contributors, 21  were corporations,  9 were  unions, and  8 were                                                               
PACs  or trade  associations.    The case  also  cited an  AkPIRG                                                               
report in  the early 1990s, which  showed that more than  half of                                                               
all   contributions  were   connected   to  business   interests.                                                               
Furthermore, the  study pointed out  that there was no  danger of                                                               
quid pro quo  arrangements for those excluded  organizations.  He                                                               
clarified, "That  is to  say, the  ability of  business interests                                                               
... could amass  massive wealth and drown out  the individual who                                                               
is not associated  with business."  However, "the  exception is a                                                               
sound  one if  one believes  that all  ideas, however  unpopular,                                                               
should find their  way into the political process," he  said.  He                                                               
noted  that  to  his  knowledge,  only  the  Alaska  Conservation                                                               
Alliance has taken advantage of this exception.                                                                                 
                                                                                                                                
MR. CONN directed  attention to SB 136 as an  example of the kind                                                               
of quid  pro quo  that the  court feared would  occur.   He noted                                                               
that  SB 136  purports to  develop a  resource development  board                                                               
made up of persons in the  timber, mining, and oil industries who                                                               
would be able  to allocate millions of dollars in  state funds to                                                               
groups  promoting  their  industrial interests.    Therefore,  he                                                               
believes the  danger posited  by the  court was  real.   Mr. Conn                                                               
said,  "The reality  is that  those members  of those  industrial                                                               
organizations who  would like to  promote conservation  causes do                                                               
have  a real  fear of  retaliation in  their jobs,  if they  were                                                               
forced  to  disclose."    Therefore,   Mr.  Conn  encouraged  the                                                               
committee,  "in  the  name  of free  speech  and  protected  free                                                               
speech," to  not add a new  restriction on an entity  that is not                                                               
related  to  business.   He  encouraged  the committee  to  leave                                                               
things as  they are, which  is a  level playing field  "given the                                                               
reality of the influence of business on our political life."                                                                    
                                                                                                                                
CHAIR  ROKEBERG asked  if Mr.  Conn  was saying  that AkPIRG  had                                                               
never engaged in any political activity.                                                                                        
                                                                                                                                
MR. CONN  replied, "No, my  testimony is  that we didn't  seek to                                                               
[go to]  court to  make use  of the exception  carved out  by the                                                               
supreme court  in ... this  process."  However, Mr.  Conn assured                                                               
the  committee  that many  of  AkPIRG's  members, when  promoting                                                               
causes that are  not popular in today's  political climate, would                                                               
be afraid  if their  names and occupations  were publicized.   He                                                               
characterized  today's  political  climate  as  a  "rabidly  pro-                                                               
development  climate"   that  is  evidenced  by   SB  136,  which                                                               
explicitly excludes an organization such  as AkPIRG.  In response                                                               
to Chair Rokeberg, Mr. Conn explained:                                                                                          
                                                                                                                                
     Senate Bill  136 sets up  a resource  development board                                                                    
     that would award  "grants" to be determined  by a named                                                                    
     representative  of  the   major  development  industry,                                                                    
     taking  state   money,  more   than  $2   million,  and                                                                    
     parceling it  out amongst various industrial  groups to                                                                    
       allow them to pay for their advertising under the                                                                        
     rubric "public education."  In other words, this goes                                                                      
      beyond what a private individual chooses to do vis-a-                                                                     
      vis the political process.  This actually takes draw-                                                                     
      ups of state money and passes it over to industry to                                                                      
     do with as it may choose.                                                                                                  
                                                                                                                                
Number 0861                                                                                                                     
                                                                                                                                
ROD ARNO, Alaska  Outdoor Council (AOC), urged the  passage of HB
177  out  of  committee.    He noted  his  past  experience  with                                                               
initiatives and AOC's  PAC.  Mr. Arno related his  belief that HB
177 is  necessary.  He  informed the committee that  according to                                                               
APOC reports, a gentleman named  Kevin Harron (ph) contributes to                                                               
House  District  23.    Mr.  Harron lists  his  occupation  as  a                                                               
consultant for Kay Brown Communications.   However, Mr. Harron is                                                               
a former  director of the  Alaska Center for the  Environment and                                                               
is  now  the  director  of  the  Conservation  Strategies,  which                                                               
received money  from Paul  Bernard (ph), who  is from  outside of                                                               
Alaska.     Mr.  Bernard  gave  $400,000   to  get  [Conservation                                                               
Strategies]  started and  then  another  $150,000 for  individual                                                               
political campaigns  during the  last election period.   However,                                                               
the APOC report doesn't mention Mr.  Bernard's name.  That is the                                                               
type of  thing that AOC [would  like to have an  honest reporting                                                               
of].                                                                                                                            
                                                                                                                                
CHAIR ROKEBERG asked  if Mr. Arno's testimony is  that Mr. Harron                                                               
was a conduit for $550,000.                                                                                                     
                                                                                                                                
MR. ARNO said that $550,000 was  spent, but Mr. Bernard's name is                                                               
not mentioned  in any  APOC report nor  is the  name Conservation                                                               
Strategies.   He noted that  he was aware of  these contributions                                                               
due to  an Anchorage Daily News  article.  Mr. Arno  informed the                                                             
committee  of  a  meeting of  the  Alaska  Wilderness  Recreation                                                               
Tourist  Association   during  which   the  director   of  Alaska                                                               
Conservation   Foundation,  Deborah   Williams  (ph),   told  the                                                               
audience she  was hired  to replace the  [members of  the] Alaska                                                               
State  Legislature with  [members of]  the new  party called  the                                                               
Alaska Conservation Majority.   Ms. Williams also  noted that she                                                               
was two years  into this ten-year project.  Mr.  Arno pointed out                                                               
that  the   Alaska  Conservation   Foundation  is   the  umbrella                                                               
organization for the Alaska Conservation  Alliance and the Alaska                                                               
Conservation  Voters, which  also include  the Alaska  Center for                                                               
the  Environment.     Therefore,  Mr.  Arno   feared  nonresident                                                               
influence in Alaska's  election process and thus  would like that                                                               
exposed.  Mr.  Arno noted that as a brown  bear hunting guide, he                                                               
should be fearful  of having his name listed, but  that is not of                                                               
concern  to   him  because  participating  in   this  process  is                                                               
important.                                                                                                                      
                                                                                                                                
Number 0607                                                                                                                     
                                                                                                                                
REPRESENTATIVE  MEYER related  his  understanding  of Mr.  Conn's                                                               
testimony  that expressed  concern of  retaliation if  the public                                                               
knew  who people  were  giving money  to  because their  position                                                               
would be unfavorable  with the majority.   However, he understood                                                               
Mr.  Arno  to say  that  he  represents  a minority,  brown  bear                                                               
hunters,  and  that  he  is  not afraid  of  people  knowing  his                                                               
position or whom he gives money to.                                                                                             
                                                                                                                                
MR. ARNO replied, "That is correct."                                                                                            
                                                                                                                                
REPRESENTATIVE  BERKOWITZ asked  if  Mr.  Arno's organization  is                                                               
subject to APOC disclosures.                                                                                                    
                                                                                                                                
MR.  ARNO replied  yes.   In further  response to  Representative                                                               
Berkowitz, Mr. Arno said that AOC reports all of its donors.                                                                    
                                                                                                                                
REPRESENTATIVE BERKOWITZ surmised, then,  that when AOC sends out                                                               
literature  endorsing  individuals,  all  the  donors  have  been                                                               
disclosed.                                                                                                                      
                                                                                                                                
MR. ARNO replied, "I'm not  going to answer that question because                                                               
I don't know."                                                                                                                  
                                                                                                                                
REPRESENTATIVE   BERKOWITZ  surmised,   then,  that   Mr.  Arno's                                                               
organization may be included under this legislation.                                                                            
                                                                                                                                
MR. ARNO said that would be fine.                                                                                               
                                                                                                                                
Number 0471                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG suggested  that Representative  Berkowitz may  be                                                               
referring to the possibility that  AOC has a periodic publication                                                               
that  endorses particular  candidates.   If  such an  endorsement                                                               
occurred in a general membership  mailing, then it may qualify as                                                               
a political  communication and thus  the organization  would have                                                               
to provide APOC  with the dues-paying membership list.   He asked                                                               
if such a situation would be problematic for Mr. Arno.                                                                          
                                                                                                                                
MR.  ARNO pointed  out that  AOC's newsletter  does not  [endorse                                                               
particular  candidates]  since it  is  separate  from AOC's  PAC.                                                               
Therefore, he indicated that AOC  wouldn't have any problems with                                                               
that.                                                                                                                           
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  asked if  the  AOC's  PAC prints  full                                                               
disclosure of all its contributors.                                                                                             
                                                                                                                                
MR. ARNO replied yes.                                                                                                           
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  asked  if  the AOC's  PAC  makes  full                                                               
disclosure on issues.                                                                                                           
                                                                                                                                
CHAIR ROKEBERG asked if  [Representative Berkowitz was referring]                                                               
to  initiatives.   He related  his understanding  that there  are                                                               
separate statutory requirements for that.                                                                                       
                                                                                                                                
MR. ARNO  replied yes and also  agreed that [AOC's PAC]  would be                                                               
willing to  continue such.   In response  to Chair  Rokeberg, Mr.                                                               
Arno agreed that would include inside and outside money.                                                                        
                                                                                                                                
REPRESENTATIVE BERKOWITZ  asked if  [AOC's PAC]  accepted outside                                                               
money "last time."                                                                                                              
                                                                                                                                
MR.  ARNO replied  yes and  agreed with  Representative Berkowitz                                                               
that it  would be in  the range of  the hundreds of  thousands of                                                               
dollars.                                                                                                                        
                                                                                                                                
REPRESENTATIVE   BERKOWITZ   commented,   "And  there   was   one                                                               
organization that opposed  you, and that's why  we're here today.                                                               
They must be very effective."                                                                                                   
                                                                                                                                
MR. ARNO remarked, "They're extremely  effective.  They grant out                                                               
now  $3 million  a year  to the  state to  advocacy groups  to do                                                               
nothing but to replace the face of the legislature.  So, yes."                                                                  
                                                                                                                                
REPRESENTATIVE  BERKOWITZ commented  that they  haven't been  too                                                               
effective.                                                                                                                      
                                                                                                                                
Number 0281                                                                                                                     
                                                                                                                                
CHAIR  ROKEBERG   referred  to   Mr.  Conn's   earlier  testimony                                                               
regarding  the  Alaska  Supreme   Court's  finding  that  certain                                                               
requirements   should   be   imposed  on   business   and   union                                                               
organizations due  to their large  influence on the  body politic                                                               
and the electoral process in Alaska.   He asked if Mr. Arno would                                                               
say  that $3  million is  a substantial  sum that  would have  an                                                               
impact regardless of whether the organization is successful.                                                                    
                                                                                                                                
MR. ARNO agreed.                                                                                                                
                                                                                                                                
REPRESENTATIVE  BERKOWITZ pondered  how much  Phillips' and  BP's                                                               
and the other advertisements [amounted to].                                                                                     
                                                                                                                                
CHAIR ROKEBERG pointed  out that because of the  enactment of the                                                               
campaign  reform  legislation  a  few years  ago,  the  petroleum                                                               
industry is a minor part of the elections in Alaska.                                                                            
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  expressed  his personal  concern  with                                                               
campaign finance that has more to  do with what is happening with                                                               
initiatives.    He  related  his  belief  that  there  should  be                                                               
individual restrictions on initiatives as well.                                                                                 
                                                                                                                                
CHAIR ROKEBERG  pointed out  that initiatives  are not  the issue                                                               
before  the  committee.   He  asked  if Representative  Berkowitz                                                               
believes  that openness  is  a central  tenet  of the  democratic                                                               
process.                                                                                                                        
                                                                                                                                
REPRESENTATIVE BERKOWITZ indicated agreement.                                                                                   
                                                                                                                                
CHAIR  ROKEBERG   referred  to   Mr.  Conn's   earlier  testimony                                                               
regarding the  Alaska Supreme Court  decision [in the  1990 State                                                             
v.  Alaska Civil  Liberties Union  case] and  asked Ms.  Kurtz to                                                             
comment.                                                                                                                        
                                                                                                                                
TAPE 01-48, SIDE A                                                                                                              
Number 0001                                                                                                                     
                                                                                                                                
KATHRYN KURTZ,  Attorney, Legislative Legal  Counsel, Legislative                                                               
Legal   and  Research   Services,  Legislative   Affairs  Agency,                                                               
explained that  HB 177 incorporates  the three-part test  that is                                                               
put forth in  the Alaska Civil Liberties  Union (AkCLU) decision,                                                             
and in fact, is almost verbatim the  same in terms of what HB 177                                                               
puts into the definition of "group."                                                                                            
                                                                                                                                
CHAIR  ROKEBERG asked  Ms. Kurtz  to  comment on  the claim  that                                                               
there  is  a  need  to  keep concealed  the  identities  of  some                                                               
contributors because of fear of retribution.                                                                                    
                                                                                                                                
MS.  KURTZ said  that that  concept  has been  argued in  various                                                               
cases, not within  Alaska but in other  jurisdictions; thus there                                                               
is  state  and  federal  case  law  available.    She  said  that                                                               
according to her understanding, there  is one case in particular,                                                               
National  Association for  the Advancement  of Colored  People v.                                                             
Alabama,  357 U.S.  449,  in  which the  court  did recognize  an                                                             
important interest in keeping  membership lists confidential, but                                                               
only  because  there was  a  very  significant danger  to  people                                                               
through disclosure.   She  added that there  are also  cases that                                                               
have said the threat of  getting less money in contributions does                                                               
not  justify  concealing  names;  that  [issue],  too,  has  been                                                               
litigated.    There  really  has  to  be  a  problem  of  serious                                                               
magnitude before it is a  situation in which disclosure cannot be                                                               
required.                                                                                                                       
                                                                                                                                
Number 0200                                                                                                                     
                                                                                                                                
MS.  KURTZ,  in response  to  questions  posed by  Representative                                                               
Berkowitz, said  that the "chilling  effect" is always  a concern                                                               
with the First  Amendment, and it is a balancing  issue.  One has                                                               
to  look  at  the  degree  that the  state's  interest  is  being                                                               
advanced versus the burden on [free]  speech.  She again said she                                                               
thought what HB 177 does is  consistent with the AkCLU case.  She                                                               
explained that  in the case of  HB 177, the Alaska  Supreme Court                                                               
has already assessed  the degree of state interest  as opposed to                                                               
the  burden on  [free]  speech by  putting  out the  [three-part]                                                               
test.  She  acknowledged, however, that she was not  sure what to                                                               
say in  terms of  a specific  analysis of the  burden.   She also                                                               
responded that HB  177 was not altering the  balance; instead, HB
177  would put  into statute  what  the AkCLU  decision says,  at                                                               
least  as  far as  the  definition  of  group  goes.   The  AkCLU                                                               
decision upheld the  state law with regard to  the prohibition on                                                               
contributions by  corporations and unions, but  the decision also                                                               
said that  a certain category  of "non-group" entities had  to be                                                               
permitted to participate if they met the three-part criterion.                                                                  
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  said  that  one  of  the  problems  in                                                               
running campaigns  is that there  are candidates and  issues that                                                               
frequently  run side  by  side.   He  referred  to the  "same-sex                                                               
marriage proposal"  from a  couple of years  ago, which  became a                                                               
hot issue.  He said it was  his opinion that the proposal was put                                                               
forth in  the legislative format in  order to make it  a campaign                                                               
issue  for individuals.    And  when an  issue  is  then tied  to                                                               
individual candidates, Representative  Berkowitz said he wondered                                                               
how  the campaign  limits addressed  in HB  177, [and]  the group                                                               
limits placed  on individuals, are  balanced against  the absence                                                               
of group limits on an issue.                                                                                                    
                                                                                                                                
MS.  KURTZ responded  that issue  advocacy is  something that  is                                                               
extremely  difficult  to  regulate   consistent  with  the  First                                                               
Amendment.   What  the state  campaign  law can  do, however,  is                                                               
limit "express  advocacy," for example,  "Vote for  candidate X."                                                               
What the  state campaign law cannot  do is set a  dollar limit on                                                               
individuals expressing views on issues.                                                                                         
                                                                                                                                
REPRESENTATIVE BERKOWITZ asked if it  were possible to reach into                                                               
the issues, based  on the reality that issues  and candidates are                                                               
linked.                                                                                                                         
                                                                                                                                
MS. KURTZ  answered that currently  there is a lot  of discussion                                                               
about  that at  the  federal  level, but  she  had  not yet  seen                                                               
anything that  changes the basic  structure, which  lets "express                                                               
advocacy" be regulated but not issue  advocacy.  That seems to be                                                               
a  line, however  difficult  to interpret,  that  is fairly  well                                                               
established at  this point  in federal law.   She  confirmed that                                                               
that was from  the point in time of the  Buckley case (Buckley v.                                                             
Valeo) on.                                                                                                                    
                                                                                                                                
Number 0438                                                                                                                     
                                                                                                                                
REPRESENTATIVE  COGHILL   said  that   from  the  point   of  the                                                               
candidate,  he   has  certainly  felt  the   chilling  effect  of                                                               
disclosure.  He  asked if there had been case  law with regard to                                                               
the chilling effect on free speech for candidates.                                                                              
                                                                                                                                
MS.  KURTZ  answered that  there  has  been case  law  [resulting                                                               
after] someone came forward and  said, "Hey, I'm being damaged by                                                               
this law requiring disclosure because  there are people who don't                                                               
want to give me money now,"  and the court responded that the law                                                               
would be upheld regardless.                                                                                                     
                                                                                                                                
REPRESENTATIVE COGHILL said he could  see that might very well be                                                               
the  case  here, because  he  does  not  think the  dollar  limit                                                               
necessarily  limits the  ability  to  contribute, and  disclosure                                                               
certainly would not either.                                                                                                     
                                                                                                                                
REPRESENTATIVE BERKOWITZ asked  Ms. Kurtz if she  had looked into                                                               
what was going on in Arizona with regard to state-funded races.                                                                 
                                                                                                                                
MS. KURTZ said she was  not familiar with that particular aspect.                                                               
She  added,  however, that  she  had  some familiarity  with  the                                                               
public-financing-of-campaigns law.                                                                                              
                                                                                                                                
REPRESENTATIVE BERKOWITZ  said it seemed having  state funding or                                                               
public  funding  could  circumvent  the  entire  problem  of  any                                                               
contributions to individuals.                                                                                                   
                                                                                                                                
MS.  KURTZ noted  that there  were a  number of  states that  had                                                               
public funding.                                                                                                                 
                                                                                                                                
REPRESENTATIVE BERKOWITZ,  in response to comments  regarding the                                                               
fiscal gap,  said that it would  not really create a  big fiscal-                                                               
gap  problem, and  further,  that  the title  of  HB 177  invited                                                               
discussion.                                                                                                                     
                                                                                                                                
Number 0613                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOTT  commented with  regard to Buckley  v. Valeo,                                                             
saying the express advocacy versus  issue advocacy was addressed;                                                               
restrictions can be  placed on express advocacy but  not on issue                                                               
advocacy.     Specifically,   issue  advocacy   can  neither   be                                                               
prohibited  nor regulated.   He  added that  the First  Amendment                                                               
concerns were  addressed by  Ms. Kurtz, and  that there  was also                                                               
case  law regarding  that issue.   He  also said  that disclosure                                                               
cannot always  be demanded.   However,  non-disclosure has  to be                                                               
justified  in  the  affirmative.    The  contributors  trying  to                                                               
justify  non-disclosure  would have  to  show  that there  was  a                                                               
threat, harassment,  or fear  of reprisal.   At that  point, APOC                                                               
could  make the  determination  whether those  names would  still                                                               
have to  be disclosed; if  one of those conditions  existed, then                                                               
the group should be able to  make a pretty good argument for non-                                                               
disclosure.                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOTT  noted  that  there was  also  case  law  to                                                               
support   this,  both   at  the   federal  level   and  in   Veco                                                             
International v.  APOC.  Recognizing  that there was no  longer a                                                             
quorum, Representative  Kott asked that the  committee advance HB
177  at  the next  available  opportunity.    He added  that  the                                                               
provisions encompassed  in HB  177 should  have been  included in                                                               
the   last  campaign   finance  reform   bill,  which   addressed                                                               
corporations  and  unions.    Representative  Kott  concluded  by                                                               
saying that  there was additional legislation  regarding campaign                                                               
finance law en route.                                                                                                           
                                                                                                                                
CHAIR ROKEBERG noted that there  was a technical problem with the                                                               
legislative financial  disclosure forms.  He  then announced that                                                               
the  [hearings on  HB 177,  HB 179,  HB 40,  and HB  4] would  be                                                               
recessed to 3/31/01.  [HB 177 was held over.]                                                                                   

Document Name Date/Time Subjects